Vascular plants appeared similar to 410 million years ago, then diverged into several lineages of which only two survive: the euphyllophytes (ferns and seed plants) and the lycophytes. We report here the genome sequence of the lycophyte Selaginella moellendorffii (Selaginella), the first nonseed vascular plant genome reported. By comparing gene content in evolutionarily diverse taxa, we found that the transition from a gametophyte- to a sporophyte-dominated life cycle required far fewer new genes than the transition from a nonseed vascular to a flowering plant, whereas secondary metabolic genes expanded extensively and in parallel in the lycophyte and angiosperm lineages. Selaginella differs in posttranscriptional gene regulation, including small RNA regulation of repetitive elements, an absence of the trans-acting small interfering RNA pathway, and extensive RNA editing of organellar genes.